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PORTLAND, Ore. - Shares of Kraft Foods Inc. fell on Wednesday after the company reported disappointing third-quarter revenues.
Kraft reported late Tuesday that its profit fell to $824 million, or 55 cents per share, for the quarter. That's down from $1.36 billion, or 91 cents per share, in last year's third quarter, which included a 57 cent gain from the Post Cereal business that it has since sold.
The results beat analyst expectations of 48 cents per share for the quarter. But revenue fell nearly 6 percent to $9.8 billion, missing Wall Street's $10.32 billion sales expectations.
Barclays analyst Andrew Lazard called it a "low quality" beat on profit, as the company made its gains largely on lower input prices and cost cutting. Kraft did report gains in the volume and mix of products selling with consumers, but Lazard noted investors hoped it would be a more significant jump.
Other analysts were cheered by the company's improved profit margins but also were disappointed by the company's weak revenue results.
Kraft did raise its full-year outlook, due in part to lower tax rate and the company still is likely to seeing soft sales volume, analysts noted.
Investors continue to keep an eye out for Kraft's formal bid for UK candy and gum company Cadbury PLC. Kraft faces a deadline Monday, imposed by regulators in London, to make a bid for Cadbury or walk away from the deal for six months.
Kraft management didn't comment directly on the deal Tuesday but hinted a bid may be coming soon.
Standard & Poor's Equity Research reiterated a "sell" opinion on Kraft shares. S&P noted that it expects Kraft to make an offer for Cadbury, which could give the U.S. food maker a strategic advantage, but said that value is more than offset by the risk implied in the acquisition price.
Shares of Kraft fell 78 cents, or nearly 3 percent, to $26.76 in afternoon trading Wednesday.
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